Howdy market watchers! 

After a long, relaxing July 4^th weekend, the return to work was a rude awakening of headlines.  July 9^th was President Trump’s deadline for trade deals and concessions from friend and foe alike or risk tariffs returning to earlier threatened levels effective August 1^st.  The Administration was actively promoting the dispatch of tariff letters on Monday and Tuesday leading up to that deadline before finally announcing that another extension would be granted to August 1^st.  

Just as the market was cautiously optimistic of another extension, Trump announced 50 percent tariffs on copper followed by 50 percent tariffs on Brazil for accusations against a former President, followed by 10 percent additional tariffs on countries aligning with BRICS, finally to be followed by late week announcements of 35 percent tariffs on Canada. And yet, the market continues to chop higher with the S&P 500 making new, record highs on Thursday.  Then, on Saturday morning, Trump announced 30 percent tariffs on Europe and Mexico starting August 1st. 

It is difficult to even keep track of where we are with tariff levels by trade lane. I would concur with JP Morgan Chase CEO Dimon that “[markets are] a little desensitized”.  The same seems to be true of the grain markets vis-à-vis the Russian war in Ukraine.  However, Trump is upping the rhetoric regarding Putin’s stringing along the US regarding progress towards a peaceful resolution.  

Crude oil rebounded Friday as Trump says a major announcement will be made Monday regarding Russia.  The expectation is for a dramatic increase in sanctions on exports important to the Russian economy.  Europe is also discussing a lower price cap on Russian oil.  OPEC this week increased output lower than the market expected, keeping oil prices firmer.  Barring these developments and the recent stepped-up Houthi attacks in the Red Sea, I believe Trump wants crude oil prices in the lower $50s to curb US inflation to the point of accelerated interest rate cuts.  We are not there yet, however, with Middle East conflicts still simmering despite China growth decelerating.  

The US dollar has rebounded this week, which put some downward pressure on commodities, but overall, energy and metals finished the week strong, especially silver, up 5 plus percent on Friday alone.  After patiently awaiting for disaster relief funds to flow, Ag. Secretary Rollins finally announced on July 9^th that the Supplemental Disaster Relief Program (SDRP) would be set in motion for agricultural producers who experienced losses for eligible crops in 2023 and 2024.  This was in addition to Trump’s large policy victory in passing the One Big Beautiful Bill through Congress before the holiday, meeting his deadline to sign into law on July 4^th.  

There are a lot of components to this OBBB and for insured grain producers, it raises the PLC trigger prices for corn from $3.70 to $4.10, beans from $8.40 to $10.00 and wheat from $5.50 to $6.35.  I also understand that farmers will be paid the higher of ARC-CO or PLC instead of what they designated.  

Support for the livestock sector seems more regulatory in nature, but there are also enhanced disaster relief provisions.  Mandatory Electronic IDs for Interstate Cattle Movements are also being implemented by 2026 and so watch for the rollout of these requirements.  

The volatile week in markets capped off with USDA’s monthly WASDE and Crop Production reports on Friday.  Overall, there was a bullish tilt to USDA’s latest numbers despite grain markets easing post-report into the close.  Old crop ending stocks for both corn and soybeans came in lower than trade expectations while the same goes for new crop ending stocks for corn and wheat, but slightly higher than trade guesses for soybeans. Updated row crop production forecasts came in lower for corn on unchanged yield of 181.0 bushels per acre (bpa) while soybean production was slightly higher than expectations, but below last month also on unchanged yields of 52.5 bpa.  

All wheat class production came in slightly higher than expected as well as above last month driven by the smallest categories of white, other spring and durum crops.  Hard red winter wheat production that trades on the KC wheat futures, came in 16 million bushels below trade guesses and 27 million bushels below last month.  Soft red winter wheat that trades off the Chicago wheat futures also came in below trade expectations as well as last month’s estimates.  And yet the wheat markets sank lower into Friday’s close although both contracts did make new, daily highs overnight.  With issues emerging for Canadian wheat and these tighter production and ending stock numbers, I believe we could see the wheat market recapture some ground next week. 

However, we also need help from the corn market, which needs help from the crude oil market.  Brazilian corn and soybean production estimates came in lower than trade guesses, but higher than last month while soybeans were unchanged from last month, but lower than trade expectations.  Argentine corn production was unchanged from last month while soybean production was increased by 0.9 million tons.  

Globally, new crop corn ending stocks for 2025/26 were below last month and well below trade guesses that were calling for an increase.  Soybean ending stocks increased over last month, but fell short of the trade expectations for an increase.  Wheat stocks were both lower than last month as well as trade expectations as well as last year lending further support to the wheat complex.  

While these numbers tell a story, there have been phenomenal wheat yields around the country as harvest progresses north.  Several of my clients in Oklahoma, Kansas and Missouri have reported record yields on their farms.  The USDA called wheat harvest 53 percent complete versus 49 percent expected, but closer to the 54 percent average than we’ve seen in weeks.  There are still quite a few wheat fields out there to be harvested with rain and overcast conditions continuing to delay progress.  

Corn conditions this week came in at 74 percent Good-to-Excellent (G/E), ahead of expectations while soybeans were in line with expectations at 66 percent G/E.  Spring wheat conditions, that the wheat market begins to now shift towards, were three percent below expectations at only 50 percent G/E.  Cotton conditions are now 52 percent G/E, ahead of last week and last year.  

And then there is the ever-ferocious cattle market that just cannot be stopped.  After last week’s announcement that the US-Mexico border would be reopened slowly to the flow of cattle, it was yet again closed on Thursday, following another New World Screwworm detection, this time within 370 miles of the US border.  This further progression north of the detection despite sterile fly releases was a fly in the ointment of progress towards sustained increases.  The President of Mexico says the US is over doing the situation, but a detection or outbreak in the US is the last thing any of us, not least the Administration wants on their watch.  

This reclosure resulted in an explosion and gap higher of feeder and fed cattle futures that ended well off those highs.  The bull channel of the feeder cattle chart was reached on Wednesday around that $320.00 mark and looked to be resistance until of course the new, news of the border closure.  The market closed right at the top of that channel on Thursday after an $8.00 daily range.  Interestingly, there is a chart gap on August feeders that would be filled when that contract reaches $284.250.

After such action, what wasn’t expected was the returning strength on Friday, which finished as an inside chart day, lower high and higher low.  Feeders closed $4.00+ higher while Fed cattle closed nearly $3.00 higher.  Fed cash cattle trade re-surfaced topping out the week at $230 in Texas and Kansas and $241 in Nebraska.  Wow!  What is going to break this market?  Consumer strength, but will it ever weaken?  Broader ICE raids on packing plants?  The Trump Administration reminded us all this week that agricultural workers are not exempt from deportation.  And yet the market continues to chop higher.  

We’ve said it before and these prices are even more phenomenal than they were last time we said it, but these are $8.00 corn prices, $20.00 soybean prices and $12.00 wheat prices only in the cattle complex.  

The higher value of cattle makes the cost of put options and LRP higher, but it may be well worth paying the premium and keep the upside open than keeping pace with the short-term margin squeeze of hedges.  Even more important than that is to keep them alive and focus on animal health as losing one may take 5+ head to make up for.  

Sidwell Strategies is the one-stop shop to protect cattle with futures, puts, LRP or a combination of all, which is probably the best strategy overall.  If you’re ready to trade commodity markets, give me a call at (580) 232-2272 or stop by my office to get your account set up and discuss risk management and marketing solutions to pursue your objectives.  Self-trading accounts are also available.  It is never too late to start and there is no operation too small to get a risk management and marketing plan in place.  

Wishing everyone a successful trading week!  Let us know if you'd like to join our daily market price and commentary text messages to stay informed!

Brady Sidwell is a Series 3 Licensed Commodity Futures Broker and Principal of Sidwell Strategies.  He can be reached at (580) 232-2272 or at brady@sidwellstrategies.com.  Futures and Options trading involves the risk of loss and may not be suitable for all investors. Review full disclaimer at https://www.sidwellstrategies.com/fccp-disclaimer-21951.